Fajarasia.id — November 2025 The Indonesian government is accelerating the rollout of the Koperasi Desa/Kelurahan (Kopdes/Kel) Merah Putih program, envisioned as a driving force for rural economic growth. A total of 80,000 village cooperatives are targeted to be fully operational by March 2026, supported by simplified regulations and a new financing scheme.
New Financing Scheme
Initially, Kopdes funding was channeled through state-owned banks (Himbara) based on cooperative proposals, as stipulated in Minister of Finance Regulation No. 49 of 2025. However, the mechanism was deemed overly bureaucratic, slowing down disbursement. The government has since revoked the regulation and introduced a fixed financing scheme of Rp3 billion per cooperative.
- Rp2.5 billion will be allocated for capital expenditures, including grocery outlets, logistics warehouses, village clinics, pharmacies, and cold storage facilities.
- Rp500 million will be reserved for operational costs to ensure cooperatives can function immediately.
Funds will not be distributed in cash but in the form of commodities or infrastructure, with non-cash disbursement managed through the Simkopdes (Kopdes Merah Putih Information and Management System).
Presidential Instruction and Budget Support
Presidential Instruction No. 17 of 2025 mandates the acceleration of Kopdes infrastructure development, backed by Village Funds amounting to Rp40 trillion from a total allocation of Rp60 trillion in 2026. These funds will be used to cover cooperative installments over the next six years. In total, financing for the program is projected to reach Rp240 trillion for 80,000 cooperatives nationwide.
Early Impact in Villages
Several pilot cooperatives have already demonstrated tangible results:
- Kopdes Panerusan Wetan in Banjarnegara, Central Java, generated Rp104.4 million in just three months through its flagship products of palm sugar and robusta coffee.
- Kopdes Aeng Batu-Batu in Takalar, South Sulawesi, has operated 10 outlets since July 2025, recording Rp400 million in turnover. The cooperative plans to expand into new ventures such as an ice factory and a fuel station for fishermen.
Transparency Challenges
Despite its promise, the program faces significant challenges. Heavy reliance on Village Funds risks making cooperatives fragile if not managed productively. Public transparency is seen as crucial to ensure funds are genuinely used for cooperative businesses rather than merely servicing installments. Calls have been made for the government to openly publish data on recipients, financing ceilings, and partner off-takers.
Toward Self-Sufficient Villages
The Kopdes Merah Putih initiative is expected to go beyond building cooperative infrastructure, aiming to foster self-sufficient villages and equitable economic distribution across Indonesia. Performance-based trials, such as the 1,000 pilot cooperatives, could serve as benchmarks before the program is scaled up nationally.*****
